EXPLANATION OF FINANCIAL TERMS
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Death-in-service benefits
Lump sum and pension paid to
the spouse or dependants of an employee who dies while still employed.
Derivatives
Complex financial instruments
based on currencies, interest rates or shares that have made some people a lot
of money and lost many other people a lot of money. For example, it was derivative
trading that sank the Barings merchant bank.
Discount broker
A discount broker will sell
you a unit trust more cheaply by avoiding the 3 per cent commission that is normally
paid to an intermediary.
Dividend
On some shares you get a modest
payout every six months or a year. In American this is more likely to be quarterly.
Dividends are also paid out on gilt-edged stock.
Dividend cover
The number of times the dividend
per share can be divided into the earnings per share. The higher the cover, the
safer your dividend.
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